Food Logistics serves the entire food supply chain industry with targeted content for manufacturers, retailers, and distributors.
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W hile a natural disaster like the late August San Fran- cisco earthquake drives home the need for emergency preparedness in the food supply chain, the more subtle changes in consumer lifestyles point to less dramatic but equally alarming aspects of a changing retail land- scape. Consumers, armed with Internet connectivity, are purchasing food when and where they want like never before. Te result is a more fragmented retail marketplace that makes logistics more important for food marketers. The recent U.S. Grocery Shopper 2014 Trends report from the Food Marketing Institute (FMI) examines shifts in consumer shop- ping habits. The data was based on an online survey of 2,116 U.S. shoppers between the ages of 18 and 74. The changes detailed in the 142-page report impact every player in the retail food chain. Every player needs to know where the consumer is spending more of their time. Processors, wholesalers and retailers all need their logistics partners to be up to speed on the challenges they face. Who shops the way they used to? As I scanned the FMI report, I was struck by how many of the changes I could relate to as a shopper. I had not realized how much my own habits have changed in recent years. Several years ago, my wife and I made one weekly trip to the same supermarket for groceries. Today, we go to four retailers a week – two "dedicated" (traditional) supermarkets, one general merchandise discounter that sells food, and a membership warehouse club. In addition, every other week, we visit an independent grocer that specializes in fresh produce and often has outstand- ing limited-time offers. We also review coupons two or three times a week from CVS and daily via email. My own experience speaks to one of the FMI report's overriding themes – the jump in the number of consumers who no longer have a primary store for food. Clearly, I am not the only shop- per who no longer relies on one store to satisfy all his or her needs. The report notes that 9 percent of consumers in 2014 said they have no primary store for grocery shopping. That might not sound like a big number, but it triples the previous year's number. The trend first emerged in 2011 when 2 percent of consumers indicated no primary store for food purchases. The lack of a primary destination for food challenges food marketers to manage more different types of retail destinations. This represents both a marketing and logistics challenge. Longer-term trends, meanwhile, continue to confront the food industry. Away-from-home shopping grows Away-from-home food spending has been growing at the expense of at-home food spend- ing since 1953. In 2006, the Great Recession delivered the first and only blip in this trend, but the interruption didn't last long. Away- from-home food spending rebounded in 2008, and in 2014, away-from-home nearly matched at-home food spending. If present trends continue, foodservice could overtake retail in con- sumer food spending. Food logistics professionals will continue to play a big role in enabling manufacturers to cash in on growing foodservice sales. E-commerce, meanwhile presents another opportunity, one that relies on astute logistics support as much as any sales channel. Thus far, it doesn't look like e-commerce plays a big role in food sales; only 8 per- cent of consumers have ordered groceries online, the report notes. But as a shopping tool, the Internet is empowering many shoppers to determine what products they want and where to get them. While only 8 percent of consumers have ordered groceries online, 27 percent have used the Internet to view prices, availability and coupons in plan- ning a shopping trip, the FMI report notes. Food marketers need to stay connected to consumers on an ongoing basis if they want to win their business. The more shopping options merchants give consumers, the more they will sell. To maximize options, food companies need to be able to ship orders on fast notice from different delivery points. Keep in mind that mobile Internet connectivity has only recently become a common lifestyle, and the millennial generation has not reached maturity as a buying audience. Big changes are in store. Millennials bring different habits The FMI report also notes the millennial generation is first genera- tion to engage in "meal based" shopping. This refers to planning a gro- cery list around meals as opposed to the traditional mindset of keeping a kitchen pantry stocked. These millennial consumers are as likely to build their shopping list around recipes or a plan of specific meals as around sales specials promoted by a store. Yes, I was surprised by how many of the changes in the FMI report I could relate to as a shopper. But when I consider the fact that I am a baby boomer, I can only imagine how different the retail food land- scape will look when the millennial generation reaches their prime spending years. ◆ Elliot Maras is managing editor of Food Logistics. Today's Food Shoppers Are Less Likely To Have A Primary Destination Food marketers must cater to a more mobile buying audience; logistics partners can help them succeed. 50 SEPTEMBER 2014 • FOOD LOGISTICS www.foodlogistics.com E L L I O T M A R A S FOOD (and More) FOR THOUGHT M A R A S Source: Food Marketing Institute U.S. Grocery Shopper Trends, 2011-2014 2011 2012 2013 2014 2% 2% 3% 9% SHOPPERS INDICATING: NO PRIMARY FOOD SHOPPING STORE